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An open response to david l. eves of xcel energy

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Basit Mustafa 2975 13th St. Boulder, CO 80304 Mr. David L. Eves President & CEO – Public Service Company of Colorado 1800 Larimer Street, Suite 1100 Denver, CO 80202 October 24, 2011 Dear Mr. Eves – Thank you for taking the time to send Boulder voters a letter detailing Xcel Energy’s opposition to ballot measures 2B and 2C. I typically don’t send letters of thanks to those who waste ink & paper to fill my mailbox with threats, pseudo-­‐truths, & baseless supposition. However, as a previously undecided voter on the question, your note helped me cast my vote in favor of 2B/2C this afternoon without trepidation. Now, Mr. Eves, I appreciate that, as an officer of Xcel Energy, you are duty-­‐bound to act in the interest of your shareholders, but, that does not absolve you of the responsibility to be up-­‐front with your customers or afford you license to play fast & loose with the truth. Your claims that 2B and 2C necessarily incur or somehow constitute a “hostile condemnation process in the courts” involving “years of litigation” are simply not true – they are baseless supposition at best. In fact, I see the situation as quite the opposite: Xcel controls whether this process would go smoothly or be mired by what you describe as “litigation and uncertainty” simply by the level of cooperation the Public Service Company of Colorado (PSCo) exhibits (or chooses not to) in divesting distribution & generation assets at a fair market value. Or, on the other hand, PSCo has sole discretion in making these threats a reality by acting in a retaliatory manner by inflating sale prices, throwing forth technical barriers, and complicating demarcation to try and retain control of grid assets or mire the municipalization process in costs, delays, and negative press. However, that, or any other red herring – be it costs, Xcel’s claimed progress towards renewables, or fancy glossy marketing materials & slogans from Xcel aren’t what cast my ballot for me. These are all distracting accouterment adorning the core of the issue: Xcel Energy is responsible, by nature, to its shareholders and the profit motive. Intrinsically, there is nothing wrong with this notion. In fact, as a shareholder of many corporations, former employee of a major corporation, and a founder of my own, I truly appreciate that idea. But, I also appreciate the deeper implications it has for energy policy in Boulder. I’m not interested in the fancy portmanteau named programs Xcel has touted as “innovative” in renewable capacity (many of which were done in part or in whole to meet state or Federal mandated generation-­‐mix or clean-­‐air requirements, I might add). I’m also not convinced by Xcel’s claims, graphs, and thick glossy-­‐stock printed collateral boasting a “proven track record” in renewable energy. Instead, as an astute investor, businessman, and shareholder, I’m particularly swayed by certain facts gleaned from your annual report, balance sheet, and investments, which frankly speak louder to the issues than any letter you might send my way (speaking directly to facts that Xcel has largely kept off their talking points prompter on the issue, for obvious reasons!). Anyway you slice it, Xcel is “big coal”, and has not been “responsible” by Boulder customers (let alone nature). Xcel’s 2010 SEC 10-­‐K filing demonstrates that the PSCo enjoyed a 19% improvement in diluted earnings per share. Of course, the informed voter will not be surprised that this is the case, since Xcel fought for (and was awarded) the nation’s 2nd highest electrical rate increase (21.4%) in

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2010. The story becomes even more sordid when you recall that the primary justification for this rate increase to the PUC was a $1.3 billion expenditure to construct the brand-­‐new Comanche 3 coal-­‐fired plant and the conversion of a former nuclear facility to fossil-­‐fuel based generation. This is not the picture of the clean and renewable-­‐centric Xcel your corporation has spent millions trying to portray, is it? There are so many more examples of how the entire gamut of Xcel’s asset mix, investment posture, and business model demonstrate that Xcel is neither committed to renewables nor interested in any other goal than protecting their profit motive and their shareholders’ pecuniary interest (either in Boulder, in the PSCo, or across their entire portfolio of businesses, distribution infrastructure, or generating capacity). In reality, the facts (and history) confirm an even more disappointing outcome: Xcel (and the PSCo) will act in its own pecuniary interest and do only what they must when their feet are held to the (coal) fire to demonstrate a (token) shift to renewables, and not only do they remain firmly encamped in coal country, but they continue to lay deeper foundations there, too. But, I won’t waste your time (or any more paper) waxing poetic about the story the actual numbers tell themselves (I’ll believe an audited 10-­‐K filing over glossy inserts in my Xcel bill/from an Xcel funded PAC any day, by the way). Instead, I’ll leave you with this thought: after being bullied & threatened by your letter and the various “citizens groups” Xcel has funded to the tune of nearly $250,000.00 (at last count – the number invariably will continue to tick upwards in the final days of the campaign), I’m left with solid confirmation that our energy future is not well-­‐cared for in your hands and should not be in the hands of your corporation. Xcel’s values & conduct in the past decade in how it has done business and, more recently, with how it has approached the 2B/2C question has given me pause and reason to be excited to see even an inefficient, bumbling, and slow government entity take the reins (although I truly believe the City of Boulder can do much better than that and isn’t nearly as incompetent has Xcel has painted them to be!). Again, Mr. Eves, thank you for clearing the air on these ballot issues – it helped me do something “Responsible by Nature” and vote to find a way to put more naturally responsible leadership in place for my utility needs. Sincerely, Basit Mustafa Boulder, CO Meter #17B782800A cc: Ms. Erica Stutzman, Boulder Daily Camera Editorial Board Mr. Benjamin G.S. Fowke III, Chairman of the Board, President, and CEO – Xcel Energy

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(l Xcel Energy• RESPONSIBLE BY NATURE 1M David L. Eves President and CEO Public Service Company of Colorado 1800 Larimer Street, Suite 1100 Denver, CO 80202 October 20, 2011 Dear Voter, The upcoming election is very important-youll decide who will be your electric service provider with your vote on ballot measures 2B and 2C. You have probably received and heard information from both sides of this important issue. While it may be difficult to determine the validity of the many projections and claims about forming a - city-owned and-o-p-erateue1e-ctric utility, its easierto---onderstam:l""what you--a-treadynave-oy lool<ing at Xcel Energys proven track record in renewable energy, reduction of carbon dioxide and other emissions, energy conservation programs, highly reliable service and reasonable rates. Measures 2B and 2C do not keep options open or increase leverage with Xcel Energy. Recently, the proponents of 28 and 2C have claimed that approval of these measures would simply keep Boulders options open and set the stage for future negotiations. Nothing is further from the truth. Measures 28 and 2C fund and authorize the start of a hostile condemnation process in the courts, launching years of litigation and uncertainty, both for the city and Xcel Energy. The measures close doors rather than open them. We serve more than 170 Colorado communities and 1.3 million customers outside of Boulder. Each city and town expects us to treat it fairly and not provide one community an unaue advantage, even with the prospect of condemnation looming. Municipalization is not the right path to obtain more renewables or reduce carbon . But if the city decides to form a municipal electric system, we need to protect the interests of our other customers. Measures 2B and 2C could affect access to our popular renewable energy and energy efficiency programs. Approval of these measures would cause us to act quickly to determine, with the city and the Colorado Public Utilities Commission, whether Boulder customers may continue to participate in many of our programs, such as Solar*Rewards, SaversSwitch, energy efficiency and conservatiOn -caemand-s1ae management or ITSIV1) programs ana -our proposeanew long-term Windsource® program. The benefits you receive as participants in these programs are based upon an on-going relationship with us. Program funding and rebates are borne by all Xcel Energy electricity customers, even though our Boulder customers participate and benefit at much higher levels than average. Its questionable if these renewable energy and efficiency programs can continue in Boulder over the next five to seven years- the time it could take to go through the condemnation process- without the citys commitment to reimburse other customers and the company for costs incurred in Boulder. It is misleading to say there are no adverse consequences if 28 and 2C are approved. Due to key undcrootimoting in the citya foCil@ibility otudy, H1c. cre>!;ltion of ::1 municip~l utility Qnt:Jil~ ~ignifir.a nt drawbacks. During the five to seven years it will take to form the utility, renewable energy and energy efficiency funding may be completely stopped.

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Get the factsThere are a variety of inaccurate statements being made about your service, our programs , theballot measures, our energy portfolio mix and the true costs of forming a municipality. One recentexample is the claim that Xcel Energy has plans to build new coal plants in Colorado- this is falseand completely unfounded.There are additional reasons to vote NO on 28 and 2C, including the illusion of on-going rateparity, unlimited city bonding authority, the fact that the measures do not require or guaranteeadditional renewable energy, and the risk to reliable service. Get the facts by reading the"Challenges of Municipalization" on our website at xcelenergy.com/boulder and reviewing theactual ballot language.We want to continue as your energy provider. We are proud of our environmentalaccomplishments, our renewable energy and energy efficiency programs, our highly reliableservice, our customer service and our reasonable rates.We believe that by working together we can achieve your energy and environmental goals fasterand more effectively than through the citys condemnation of our business and facilities inBoulder.Sincerely,David L. EvesPresident and CEOPublic Service Company of ColoradoAn Xcel Energy company

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(l Xcel Energy· Xcel Energy: A Proven Energy Partner for Boulder Creating a clean energy future at a reasonable cost • Serving Boulder for over 100 years • Customers can already choose • $4 million spent in 2010 with • High reliability with electricity 100% renewable energy through Boulder companies available 99.98 percent of the time our Windsource® program • Most generous corporate giver in • $13.5 million in fees and taxes pai d Colorado (Denver Business Journal) • Electric rates below the national average to Boulder in 2010 for the past three years; contributed $162,000 in 2010 to Boulder non profitsOne elwirollmentalllrcrderh-etptng-an-oth-erl"eader• No. 1 utility wind energy provider in the United States (American Wind Energy Association)• In the top 10 for solar capacity (Solar Electric Power Association)• One of the largest voluntary green energy programs, Windsource®(NREL)• Five times on Dow Jones Sustainability Index North America• American Carbon Registry Utility Excellence winner 2011• Power Company of the Year 2010, Platts Global Energy Awards• EPA Energy Star Partner of the Year 2011• Were ahead of schedule to meet the states renewable energy standard of 30 percent renewables by 2020, the second-highest standard in the United States.We are on track to reduce our carbon dioxide emissions 28% by 2020 from 2005 levels 30 20 10 2005 MEASURED IN MilliONS OF TONS 2020We offer customers clean energy choiceOur successful energy-saving and voluntary renewable energy programs providecustomers choice in how they receive and use energy. These programs are popularwith Boulder customers. For information about our programs. visit xcelenergy.com. 34%of Colorado BOULDER CUSTOMERS